World Bank Says It May Raise Thai Economic Growth Forecast

(Bloomberg) -- The World Bank may boost its projection for economic growth in Thailand, where the pace of expansion hit a five-year high last quarter.

A stable outlook and signs that Thai companies are investing again domestically are among the positive factors for the second-largest economy in Southeast Asia, said Ulrich Zachau, the World Bank’s director for Thailand and regional partnerships. The lender’s current estimate is for a 4.1 percent climb in gross domestic product in 2018.

"We may update our projections again -- we may raise them -- depending on further developments and further outcomes," Zachau said in an interview in Bangkok on Tuesday. "Does Thailand have the potential to grow significantly above 4 percent? We believe yes. It will depend on structural reforms."

Thailand must improve education standards, make public-sector management more efficient and tackle the challenge of an aging population to help raise the pace of expansion to 5 percent to 6 percent, Zachau said.

GDP rose 4.8 percent in January through March from a year earlier, exceeding all estimates in a Bloomberg survey, powered in part by tourism, exports and rebounding farm output.

The pace was the fastest under the military government that seized power in a coup in 2014. Prime Minister Prayuth Chan-Ocha has said an election will be held in February next year.

To contact the reporter on this story: Sunil Jagtiani in Bangkok at sjagtiani@bloomberg.net

To contact the editors responsible for this story: Linus Chua at lchua@bloomberg.net, ;Nasreen Seria at nseria@bloomberg.net, Karthikeyan Sundaram